Define opportunity cost. Using the table above, calculate the opportunity cost of bicycles in terms of boots and the opportunity cost of boots in terms of bicycles for each of the countries.
Define opportunity cost. Using the table above, calculate the opportunity cost of bicycles in terms of boots and the opportunity cost of boots in terms of bicycles for each of the countries.
Chapter20: International Trade
Section20.1: International Trade Theory
Problem 1ST
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Question
Trade theories suggest that both countries
Production Techniques:
Units of labour hour required per unit output
|
Tandom |
Futland |
Bicycles |
90 hours |
120 hours |
Boots |
30 hours |
50 hours |
- Define
opportunity cost . Using the table above, calculate the opportunity cost of bicycles in terms of boots and the opportunity cost of boots in terms of bicycles for each of the countries.
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